In a note, the research house said its lown growth target is underpinned by resilient private consumption and consumer spending amid a cautious outlook in 2019.
"On the other hand, downside risks are largely supported by the broad-based economy while over the longer term, we expect consumer sentiment to gradually improve and drive consumption spending," it said.
Affin Hwang's top picks are Alliance Bank with a buy call and target price of RM3.76, and Aeon Credit with a buy call with a target price of RM16.80.
Banking system loan growth grew 0.3% month-on-month and rose 4.6% year-on-year (y-o-y) in May.
The loan disbursement of RM101.5bil during the month was higher than the average monthly disbursement of RM93bil from 2014 to 2018.
"Economic sectors which continue to see positive loan growth yoy are manufacturing, retail/wholesale, construction and households.
"In terms of asset quality, the GIL ratio remained steady at 1.52% in May 2019 (+0.01ppts mom) though has edged up from Dec 2018’s level of 1.45%," said Affin Hwang.
Business loan growth grew 3.4% y-o-y in May and household loan growth rose 5.3% y-o-y.
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